h1 2013 - hapag-lloyd - global container liner shipping ... · ebit margin ( ebit / revenue) % 3.6...

hapag-lloyd holding ag 1 January To 30 June 2013

H1 2013

inTerim group reporT

summary of hapag-lloyd key figures | inTerim group reporT h1 2013

Disclaimer: This interim report contains statements concerning future developments at Hapag-Lloyd. Due to market fluctuations, the development of the competitive situation, world market prices for commodities, and changes in exchange rates and the economic environment, the actual results may differ con-siderably from these forecasts. Hapag-Lloyd neither intends nor undertakes to update forward-looking statements to adjust them to events or developments which occur after the date of this report.

This report was published on 7 August 2013.

1) As at 30.6.2013 2) As at 31.12.2012

key operATing figures1.4. – 30.6.

20131.4. – 30.6.

20121.1. – 30.6.

20131.1. – 30.6.

2012Change

absolute

Total vessels1) 154 147 154 147 +7

aggregate capacity of vessels TTeu 733 667 733 667 +66

aggregate container capacity TTeu 1,077 1,047 1,077 1,047 +30

Bunker price (average) usd/t 622 694 624 680 –56

freight rate (average) usd/Teu 1,499 1,594 1,522 1,539 –17

Transport volume TTeu 1,389 1,359 2,715 2,682 +33

revenue m eur 1,706 1,794 3,358 3,395 –37

Transport expenses m eur 1,464 1,612 2,954 3,107 –153

eBiTda m eur 147.8 102.0 171.8 80.9 +90.9

eBiT m eur 60.9 24.1 2.0 –78.9 +80.9

eBiT adjusted m eur 66.7 30.8 13.5 –68.7 +82.2

group profit/loss m eur 20.9 –7.3 –72.7 –139.7 +67.0

Cash flow from operating activities m eur 14.9 106.9 –9.4 100.9 –110.3

key reTurn figures

eBiTda margin (eBiTda / revenue) % 8.7 5.7 5.1 2.4 +2.7ppt

eBiT margin (eBiT / revenue) % 3.6 1.3 0.1 –2.3 +2.4ppt

eBiT margin adjusted % 3.9 1.7 0.4 –2.0 +2.4ppt

key bAlAnCe sheeT figures As AT 30 june

Balance sheet total m eur 7,022 6,8512) 7,022 6,8512) +171

equity m eur 3,060 3,1142) 3,060 3,1142) –54

equity ratio (equity / balance sheet total) % 43.6 45.52) 43.6 45.52) –1.9ppt

Borrowed capital m eur 3,962 3,7372) 3,962 3,7372) +225

key finAnCiAl figures As AT 30 june

financial debt m eur 2,591 2,3722) 2,591 2,3722) +219

Cash and cash equivalents m eur 342 5612) 342 5612) –219

net debt (financial debt – cash and cash equivalents) m eur 2,250 1,8112) 2,250 1,8112) +439

gearing (net debt / equity) % 73.5 58.22) 73.5 58.22) +15.3ppt

number of employees As AT 30 june

employees at sea1) 1,332 1,302 1,332 1,302 +30

employees on land1) 5,639 5,666 5,639 5,666 –27

hApAg-lloyD ToTAl 6,971 6,968 6,971 6,968 +3

3

ConTenTs

4 hapag-lloyd’s capital market activities

7 interim group management report

7 Business and strategy

7 Group structure

8 Operating activities

8 Company objectives and strategy

9 Business development

9 General economic conditions

10 Sector-specific conditions

11 Important performance indicators

15 Group earnings position

18 Group financial and net asset position

21 Risk and opportunity report

22 Events after the balance sheet date

22 Prospects

24 interim consolidated financial statements

24 Consolidated income statement

25 Consolidated statement of comprehensive income

26 Consolidated statement of financial position

28 Consolidated statement of changes in equity

29 Condensed consolidated statement of cash flows

30 Condensed notes to the interim consolidated financial statements

30 Notes on the principles and methods underlying the interim consolidated

financial statements

34 Selected notes to the consolidated income statement

34 Selected notes to the consolidated statement of financial position

38 Notes to the condensed consolidated statement of cash flows

38 Other notes

40 Significant transactions after the balance sheet date

42 financial calendar, imprint

hapag-lloyd inTerim group reporT h1 · 2013 i ConTenTs

4

hApAg-lloyD’s CApiTAl mArkeT ACTiviTies i hapag-lloyd inTerim group reporT h1 · 2013

hapag-lloyd’s CapiTal markeT aCTiviTies

Sustained upward trend in stock markets

The stock markets continued to trend upwards in the first six months of 2013. The most important

inter national stock market indices stood considerably higher than they had both one year ago and at year-

end 2012, some considerably.

This was mainly attributable to the Bank of Japan’s highly expansionary monetary policy and the improved

macroeconomic situation in the USA. The ongoing recession in many eurozone countries together with

uncertainty surrounding the continuation of the expansionary monetary policy of the US Federal Reserve and

concerns over the solidity of Chinese commercial banks led to significant price fluctuations in international

financial markets, especially towards the end of the reporting period.

Unrelenting pressure on freight rates, notably in Far East trade, and the persistently difficult income situation

for most shipping companies resulted in below-average share price performance of publicly listed container

liner shipping companies in the first six months of 2013.

developmenTs in The mosT imporTanT indiCes

Indices* 30.6.2013 31.3.2013 31.12.2012 30.6.2012 Change (30.6.) 2013 vs. 2012

Dow Jones Industrial 14,910 14,579 13,104 12,880 +15.8%

MSCI World 1,434 1,435 1,339 1,236 +16.0%

EuroStoxx 50 2,603 2,624 2,636 2,266 +14.9%

DAX Index 7,959 7,795 7,612 6,416 +24.0%

Nikkei 225 13,677 12,398 10,395 9,007 +51.8%

Source: Bloomberg; *Last trading day

5

hapag-lloyd inTerim group reporT h1 · 2013 i hApAg-lloyD’s CApiTAl mArkeT ACTiviTies

Demand for corporate bonds slows noticeably

Uncertainty about the continuation of the US Federal Reserve’s highly expansive monetary policy and a

noticeable decline in the willingness of institutional investors to invest had a particularly negative impact on

the development of corporate bonds towards the end of the reporting period. According to an analysis of

the investment bank Société Générale, the volume of high-yield corporate bonds issued in Europe shrank

to EUR 3.9 billion in June 2013, a sharp drop compared with the record volume of EUR 11.8 billion in bonds

having just been issued by companies in May.

Hapag-Lloyd’s bonds

On 28 June 2013, the bonds issued by Hapag-Lloyd AG were traded at 103.69% (EUR tranche) and

103.07% (USD tranche).

50

40

60

70

80

90

100

110

120

130

Jan2011

may2011

sep2011

Jan2012

Jan2013

Jun2013

indexed share prices of container shipping companies (january 2011 to june 2013)

daX msCi World indexed share prices of container shipping companies source: Bloomberg

may2012

sep2012

6

hApAg-lloyD’s CApiTAl mArkeT ACTiviTies i hapag-lloyd inTerim group reporT h1 · 2013

The Hapag-Lloyd Group still has solid balance sheet ratios. The equity ratio (equity/balance sheet total)

as at 30 June 2013 came to around 44%. Gearing remains comparatively moderate at approximately 74%.

As at 30 June 2013 cash and cash equivalents accounted for approximately 5% of the balance sheet total.

The agreed covenants were once again fulfilled as at 30 June 2013.

As at 30 June 2013, Hapag Lloyd’s rating remained unchanged with B2/Negative Outlook (Moody’s) and

B+/Negative Outlook (Standard & Poor’s).

Open and transparent communication

The focus of Hapag-Lloyd’s investor relations activities is on communicating promptly with all investors and

capital market participants. In the first six months of 2013, Hapag-Lloyd attended the following international

capital market conferences:

A large number of individual discussions were also held with interested international analysts and investors.

Published reports are available on the Hapag-Lloyd website – www.hapag-lloyd.de/

en/investor_relations/reports.html

key Bond daTa

Issue volume Maturity* Coupon Issue price Price on (total) 28.6.2013

EUR tranche EUR 480 million** 15.10.2015 9.00% 99.50%*** 103.69%

USD tranche USD 250 million 15.10.2017 9.75% 99.37% 103.07%

Price data: Bloomberg; * Callable; ** Increase of EUR 150 million to 103.38%; *** Issue price

Date location Conference host

15 January london 9th annual high yield & leveraged finance Conference Bnp paribas

21 march new york 7th annual invest in international shipping forum Capital link

15 may düsseldorf german Credit Conference ikB

13 June london 17th annual european leveraged finance Conference deutsche Bank

7

hapag-lloyd inTerim group reporT h1 · 2013 i inTerim group mAnAgemenT reporT

business AnD sTrATegy

group sTruCTure

Hapag-Lloyd Holding AG is the parent company of the Hapag-Lloyd Group and holds all of the shares in

Hapag-Lloyd AG (Hapag-Lloyd subgroup). At the balance sheet date (30 June 2013), a total of 49 direct and

indirect subsidiaries and five equity-accounted investees belonged to the group of consolidated companies

of Hapag-Lloyd Holding AG. The equity-accounted investees include two strategic holdings in container

terminals in Hamburg and Montreal.

Shareholder structure and corporate management

As at 30 June 2013, 78.0% of the shares in Hapag-Lloyd Holding AG were held by Hamburgische See-

fahrtsbeteiligung “Albert Ballin“ GmbH & Co. KG (“Albert Ballin“ consortium) and 22.0% by the TUI Group.

Change in the Hapag-Lloyd Executive Board

With the decision by the Supervisory Board from 12 June 2013, Jesper Praestensgaard, Executive Board

member of Hapag-Lloyd AG responsible for the Global Markets and Global Accounts division, left the

Executive Board of Hapag-Lloyd.

inTerim group managemenT reporT

Shareholding in %

hamburgische seefahrtsbeteiligung “Albert ballin“ gmbh & Co. kg 78.0%

HGV Hamburger Gesellschaft für Vermögens- und Beteiligungsmanagement mbH 36.9%

Kühne Maritime GmbH 28.2%

SIGNAL IDUNA Gruppe 5.3%

HSH Nordbank AG 2.9%

HanseMerkur Versicherungsgruppe 1.8%

Investorenpool unter Leitung von M.M.Warburg & CO KGaA 2.9%

Tui Ag / Tui-hapag beteiligungs gmbh 22.0%

Total 100.0%

8

inTerim group mAnAgemenT reporT i hapag-lloyd inTerim group reporT h1 · 2013

operATing ACTiviTies

Hapag-Lloyd is Germany’s largest container liner shipping company and is one of the world’s leading liner

shipping companies in terms of global market coverage. The Hapag-Lloyd fleet consists of 154 container

ships (30 June 2013). Hapag-Lloyd currently has over 300 sales offices in 114 countries and offers its

customers worldwide access to a network of 93 liner services. In the first six months of 2013, Hapag-Lloyd

served 15,887 customers around the world.

The functional currency used by the international container liner shipping industry – and therefore also the

Hapag-Lloyd subgroup – is the US dollar. Payment flows in currencies other than the US dollar are hedged

to the US dollar as appropriate. However, the reporting currency of Hapag-Lloyd Holding AG is the euro.

The translation of individual balance sheet items from foreign currencies, such as fixed assets and financial

debt, results in some cases in significant valuation effects. The translation differences are recognised directly

in other comprehensive income.

CompAny objeCTives AnD sTrATegy

The Hapag-Lloyd Group’s prime objective is long-term profitable growth. Increasing global demand for

container transport forms the basis for this planned organic growth. Based on current forecasts (IHS Global

Insight, July 2013), the volume of global container transport should grow by 2.4% to 124.6 million TEU in

2013 and by a further 4.8% in 2014. Selling services at viable prices is more important to Hapag-Lloyd

than expanding volume at any cost.

Hapag-Lloyd uses adjusted EBIT – earnings before interest and taxes adjusted for special items – as the key

parameter for the internal management of its operating activities. The main influencing factors are transport

volume, freight rate, the US dollar exchange rate against the euro, and operating costs including bunker

price. The strategy of achieving long-term profitable growth in operating activities is pursued with the help

of these key figures. In addition to the operating result (adjusted EBIT), earnings before interest, taxes,

depreciation and amortisation (EBITDA) is likewise used as an important parameter. EBITDA is an important

indicator of the achievement of sustainable company results and gross cash flows. It has a special signifi-

cance for capital-intensive companies. Hapag-Lloyd – which has a balanced fleet structure, owning approxi-

mately 50% of its fleet – uses EBITDA as an important parameter for investment and financing decisions.

This is used to derive the sufficient liquidity reserve at any given time as well as the corresponding capital

adequacy.

9


The generation of sustainable cash flows, solid corporate financing, and therefore, in particular, a good

liquidity and equity base, are once again key objectives of the corporate strategy in the 2013 financial year.

As at 30 June 2013, Hapag-Lloyd had a liquidity reserve (consisting of cash, cash equivalents and unused

credit facilities) totalling EUR 414.4 million (31 December 2012: EUR 632.9 million). In line with its financial

strategy, it secured financing for all its completed and planned investments in ships and containers before

placing orders.

With demand for container transport services continuing to rise, container shipping will remain a growth

industry in the long term. In order to utilise the medium-term expansion opportunities resulting from market

growth and realise economies of scale in its ship operations, Hapag-Lloyd will launch a total of ten new very

large container vessels into service, each with a capacity of 13,200 TEU. Delivery has already been taken

of seven vessels of the “Hamburg Express” class. Three more vessels will enter service until April 2014.

business DevelopmenT

generAl eConomiC ConDiTions

Economic experts from the International Monetary Fund (IMF) believe that global economic developments in

key industrialised countries have continued to stabilise in recent months. However, the protracted recession

in the eurozone, the restrictive fiscal policy in the US and the poorer-than-expected economic performance

of key emerging markets such as China and Brazil are holding back global growth. The IMF has once again

revised its current growth forecast for 2013 downwards, not least because of the weaker-than-expected

growth in newly industrialised countries (BRICS states). Its growth forecasts for 2013 have been downgraded

by another 0.2 percentage points. Expected growth in the volume of global trade in 2013 has been cut by

0.5 percentage points to 3.1%. Stronger global economic growth is not anticipated until 2014.

developmenTs in gloBal eConomiC groWTh (gdp) and World Trading volume

(in %) 2014e 2013e 2012 2011

Global economic growth 3.8 3.1 3.1 3.9

Industrialised countries 2.1 1.2 1.2 1.7

Developing and newly industrialised countries 5.4 5.0 4.9 6.2

World trading volume (goods and services) 5.4 3.1 2.5 6.0

Source: IMF July 2013

10


seCTor-speCifiC ConDiTions

In the medium term, demand for container transport services should rise in tandem with expected ongoing

growth in the world trading volume.

However, IHS Global Insight Industry Intelligence (July 2013) lowered its growth forecast for global cargo

volumes in 2013 (124.6 million TEU) from 3.3% to 2.4% as a result of the sluggish recovery of the global

economy. The 2014 forecast for global container transport was cut by 2.8 million TEU to 130.6 million TEU.

This means that the global cargo volume growth rate is expected to reach 4.8% in the coming year,

0.4 percentage points below what was forecast in April. This would put the expected rise in worldwide

transport volumes in container shipping for 2013 and 2014 slightly lower than the forecasted rise in global

trade.

With the total capacity of the world container ship fleet estimated at 17.4 million TEU at the beginning of

2013 (MDS Transmodal, April 2013), the nominal supply capacity should see increases totalling 1.9 million

TEU in 2013 and approximately 1.2 million TEU in 2014 due to new vessels. Due to the sharp fall in orders

for new vessels, the tonnage of the commissioned container ships is currently equivalent to 18% of the

global container fleet’s capacity. It is therefore at its lowest since Q4 2002 and still well below the highest

level seen to date, 56% in 2008. In the future as well, the actual growth in the global container fleet’s trans-

port capacity is expected to be lower than the projected nominal increase, as old and inefficient vessels are

scrapped, deliveries of newbuilds are postponed and slow steaming (reducing the speed at which services

operate) is used. For example, actual transport capacity grew by just 0.8 million TEU in 2012, as opposed

to the 1.7 million TEU predicted at the beginning of the year. According to data provided by the information

platform Clarksons Shipping Intelligence Network (July 2013), container vessels with a transport capacity of

approximately 232,000 TEU have already been scrapped in the first six months of 2013. The scrapping of

inefficient ships could increase to over 400,000 TEU for the full year 2013 (2012: 335,000 TEU), which would

exceed the previous all-time high of 379,000 TEU reached in 2009.

Although the prospects for growth remain positive in the medium term, there may be temporary imbalances

in supply and demand, which could have a substantial impact on the respective transport volumes and

freight rates. The ongoing rise in transport expenses seen last year is likely to weaken short-term industry

developments. This is primarily attributable to trends in bunker prices, which have more than trebled since

the beginning of 2009. To compensate for the associated higher costs, leading container shipping com-

panies have announced further sharp increases in freight rates on important trades in the course of 2013.

In view of the current competitive pressure, spot rates for container services have fallen considerably since

April 2013, especially on Asia-Europe and Transpacific trades. At the beginning of the third quarter, various

11


container shipping companies announced substantial rate increases. As a result, particularly the Shanghai

Containerized Freight Index, in particular, has gained strongly. Trends in freight rates on the respective trades

are shaped by demand and are therefore likely to keep fluctuating considerably in some cases.

Due to an expected increase in demand for container transport services in the upcoming peak season, the

number of idle ships has decreased sharply in recent months. At 439,000 TEU (AXS Alphaliner, July 2013),

the laid-up capacity corresponded to approximately 3% of the global container fleet’s total tonnage at the

end of June 2013, well below the level in the first quarter of 2013 of 830,000 TEU. The majority of idle ships

have a tonnage of up to 3,000 TEU.

imporTAnT performAnCe inDiCATors

Efficient fleet

As at 30 June 2013, Hapag-Lloyd’s fleet comprised a total of 154 container ships, which are all certified

in accordance with the ISM (International Safety Management) Code and have a valid ISSC (ISPS) certificate.

The majority of the vessels are also certified as per ISO 9001 (quality management) and ISO 14001

(environmental management). The Hapag-Lloyd fleet’s total TEU capacity amounted to 733,268 TEU.

Hapag-Lloyd also owned or leased 671,552 containers with a capacity of 1,076,920 TEU for transporting

cargo.

As at 30 June 2013, Hapag-Lloyd had taken delivery of a total of seven “Hamburg Express” class vessels

with a TEU capacity of over 10,000 TEU. There are another three ships on the current order book, each with

a capacity of 13,200 TEU.

sTruCTure of hapag-lloyd’s ConTainer ship fleeT

30.6.2013 31.12.2012 30.6.2012

Number of vessels 154 144 147

thereof

own vessels 63 59 56

leased vessels 7 7 7

chartered vessels 84 78 84

Aggregate capacity of vessels (TTEU) 733 670 667

Aggregate container capacity (TTEU) 1,077 1,047 1,047

Number of services 93 89 93

12


Transport volumes and freight rates

Freight rates and transport volumes are among the main performance indicators used to gauge corporate

development at the Hapag-Lloyd Group.

In the first six months of 2013, the freight volume rose by 1.2% compared with the previous year to

2,715 TTEU. With this, Hapag-Lloyd experienced its highest transport volume of the past five years in the

first six months of 2013. Transport volumes also rose by a gratifying amount on the Far East, Australasian

and Atlantic trades. This compensated for declining Latin American volumes.

In the first six months of 2013, the average freight rate was USD 1,522/TEU and therefore 1.1% down

on the same period a year ago. The reason for this trend was the persistently high level of competition.

This resulted in a fall in freight rates, especially on Atlantic and Australasian trades. The continued pressure

from competition in the Far East trade made it difficult to push through the announced rate increases in

the reporting period. The average freight rate in the Latin America trade increased.

developmenTs in TransporT volume By Trade

TTEU H1 2013 H1 2012 H1 2011 H1 2010 H1 2009

Atlantic 602 585 582 574 530

Latin America 566 591 559 523 408

Far East 617 583 549 563 522

Transpacific 612 618 560 518 501

Australasia 318 305 284 276 345

Total 2,715 2,682 2,534 2,453 2,307

13


Selling services at viable prices is still more important to Hapag-Lloyd than purely quantitative growth

in volume.

Quality and sustainability

Using scarce resources sustainably is becoming an increasingly important competitive factor for container

liner shipping companies. Hapag-Lloyd made its pledge to uphold sustainable business practices as

early as 1996. Both its vessels and its land-based operations are certified in line with ISO 9001 quality

standards and the environmental norm ISO 14001. The ISO certificate was renewed by the certification

body, Germanischer Lloyd, on 22 June 2012 and is now valid until 21 June 2015. Hapag-Lloyd was an

early adopter of the Ship Energy Efficiency Management Plan (SEEMP) for all vessels under the its own

management. It became compulsory on 1 January 2013.

Hapag-Lloyd was able to cut specific CO2 emissions (g/CO2 per TEU km) for its own and chartered vessels

by 4.1% in 2012. The Company will launch a total of ten newbuilds from the efficient “Hamburg Express”

class by mid 2014, thereby further improving the Hapag-Lloyd fleet’s good environmental standing.

developmenTs in freighT raTes By Trade

USD/TEU H1 2013 H1 2012 H1 2011 H1 2010 H1 2009

Atlantic 1,682 1,754 1,758 1,528 1,455

Latin America 1,424 1,379 1,364 1,312 1,253

Far East 1,287 1,289 1,454 1,576 1,055

Transpacific 1,823 1,843 1,708 1,633 1,480

Australasia 1,271 1,305 1,327 1,229 874

Total (weighted average) 1,522 1,539 1,546 1,481 1,247

14


Customers

Long-term, close business relations with clients are also important in driving value for corporate develop-

ment. Relationships with major customers are managed by a global key account team. This enables the

Company to establish and maintain sustainable customer relationships. In the first six months of the 2013

financial year, transport contracts were completed for 15,887 customers (prior year period: 17,102).

Employees

The Hapag-Lloyd Group employed a workforce of 6,971 as at 30 June 2013. The headcount changed only

slightly compared with 30 June 2012. Of the land-based employees, some 78% worked outside Germany

as at 30 June 2013.

As at 30 June 2013, 1,256 people were employed in the marine division (30 June 2012: 1,224). The increase

in the marine division in comparison to the prior year period was brought on by changes in the fleet structure.

The number of land-based employees fell in the same period by 33 to 5,556 due to further organisational

streamlining. Hapag-Lloyd employed 159 apprentices as at 30 June 2013. Due to the training year ending in

summer 2013, the number of apprentices decreased compared to the end of 2012. The number of appren-

tices will substantially increase once again when the new training year begins in August 2013.

There were 6,830 full-time equivalent employees (FTE), down slightly from 6,834 as at 30.06.2012

(less 4 employees).

numBer of employees

30.6.2013 31.12.2012 30.6.2012

Marine personnel 1,256 1,245 1,224

Shore-based personnel 5,556 5,505 5,589

Apprentices 159 200 155

Total 6,971 6,950 6,968

15


group eArnings posiTion

At the Hapag-Lloyd Group, the first half of the financial year 2013 was largely defined by persistently

intense competition and the ongoing sovereign debt crisis in the European Economic Area. As a result, the

average freight rate fell year on year by USD 17/TEU to USD 1,522/TEU (prior year period: USD 1,539/TEU).

This decline was partly offset by a 1.2% increase in transport volume to 2,715 TTEU (prior year period:

2,682 TTEU), such that revenue in the first six months of the financial year 2013 was EUR 3,357.7 million

(–1.1%), which was nearly on a par with last year (prior year period: EUR 3,395.3 million).

At USD 1.31/EUR, the average dollar/euro exchange rate was roughly the same as in the prior year period

(USD 1.30/EUR).

ConsolidaTed inCome sTaTemenT

in million EUR Q2 2013 Q2 2012 h1 2013 H1 2012

Revenue 1,705.8 1,793.8 3,357.7 3,395.3

Other operating income 48.5 45.7 62.1 91.3

Transport expenses 1,464.4 1,612.4 2,954.0 3,107.2

Personnel expenses 97.5 87.4 191.1 183.1

Depreciation, amortisation and impairment 86.9 77.9 169.8 159.8

Other operating expenses 54.9 59.6 126.4 133.0

operating result 50.6 2.2 –21.5 –96.5

Share of profits of equity-accounted investees 11.0 7.4 18.4 13.7

Other financial result –0.7 14.5 5.1 3.9

earnings before interest and tax (ebiT) 60.9 24.1 2.0 –78.9

Interest result –39.2 –30.2 –73.3 –58.2

Income taxes 0.8 1.2 1.4 2.6

group profit/loss 20.9 –7.3 –72.7 –139.7

ebiTDA 147.8 102.0 171.8 80.9

ebiTDA margin (%) 8.7 5.7 5.1 2.4

ebiT adjusted 66.7 30.8 13.5 –68.7

ebiT margin (%) adjusted 3.9 1.7 0.4 –2.0

ebiT 60.9 24.1 2.0 –78.9

ebiT margin (%) 3.6 1.3 0.1 –2.3

16


Revenue amounted to EUR 1,705.8 million in the second quarter of 2013, which was around 5% below

the figure for the same period last year. A sharp decline of about 6% of the average freight rate to

USD 1,499/TEU (prior year period: USD 1,594/TEU) could not be completely recouped by the 2.3%

increase in transport volume.

Transport expenses fell by a total of EUR 153.2 million (–4.9%) in the first six months of 2013 to

EUR 2,954.0 million (prior year period: EUR 3,107.2 million). This reduction was primarily attributable to a

decline of EUR 114.9 million in expenses for raw materials and supplies, which came to EUR 739.3 million.

The decline resulted from savings in bunker consumption as well as an 8.0% decrease in bunker con-

sumption prices, which were partly offset by expenses for bunker hedges. The average bunker price in the

reporting period was USD 624 per tonne (prior year period: USD 680 per tonne). The cost of purchased

services was also down 1.7% year on year, despite higher transport volume. This was mainly due to cost

savings achieved in the second quarter.

Other operating income came to EUR 62.1 million in the first half of 2013 and was therefore slightly

down on the same period last year (EUR 91.3 million) due primarily to lower income from the disposal of

non-current assets and lower exchange rate gains. In the second quarter of 2013, other operating income

included income of EUR 17.9 million from a container sale and leaseback transaction.

TransporT eXpenses


Expenses for raw materials and supplies 373.4 456.7 739.3 854.2

Cost of purchased services 1,091.0 1,155.7 2,214.7 2,253.0

thereof

Port, canal and terminal costs 463.6 472.5 928.2 908.0

Chartering, leases and container rentals 171.5 174.1 345.7 347.8

Container transport costs 415.5 479.0 863.6 920.8

Maintenance/repair/other 40.4 30.1 77.2 76.4


17


Changes in the USD/EUR exchange rate caused period-specific exchange rate gains and losses to decrease

considerably in the first half of 2013. This was reflected in other operating income and other operating

expenses. On balance, exchange-rate-related income and expenses resulted in a burden for earnings of

EUR 12.2 million in the first six months of 2013 (prior year period: EUR 17.0 million).

Depreciation and amortisation totalled EUR 169.8 million in the first six months of 2013 (prior year period:

EUR 159.8 million). This rise was mainly caused by depreciation on additions to the ship and container

portfolios. The other financial result of EUR 5.1 million comprises changes in the fair value of currency

options (prior year period: EUR 3.9 million).

The Group’s net operating result before interest and taxes (EBIT) amounted to EUR 2.0 million in the

reporting period. It was therefore well above last year’s six-month figure of EUR –78.9 million. Earnings

before interest, taxes, depreciation and amortisation (EBITDA) rose by EUR 90.9 million year on year

to EUR 171.8 million (prior year period: EUR 80.9 million).

Adjusted for special items from the purchase price allocation, the Group reported an operating result before

interest and taxes of EUR 13.5 million for the first half of 2013 (prior year period: EUR –68.7 million). The

figure was not adjusted for income from container sales. The adjusted EBIT stood at EUR 66.7 million in the

second quarter. All in all, the Company posted substantially better earnings in the second quarter than in

the first quarter of 2013 (adjusted EBIT: EUR –53.2 million).

The net interest result declined substantially compared to the same period of the previous year due to new

financial debt. It came to EUR –73.3 million (prior year period: EUR –58.2 million).

The Group recorded a loss of EUR 72.7 million in the first six months of 2013 (prior year period: loss of

EUR 139.7 million). In the second quarter of 2013, the Group generated a profit of EUR 20.9 million

(prior year period: loss of EUR 7.3 million).

18


group finAnCiAl AnD neT AsseT posiTion

Cash flow from operating activities

Operating cash flow came to EUR –9.4 million in the first half of the 2013 financial year (prior year period:

EUR 100.9 million).

Cash flow from investing activities

The cash outflow from investing activities totalled EUR 336.3 million in the first six months of the financial

year. This mainly stemmed from final payments for four container ships and prepayments for further

newbuilds. In addition, a non-cash investment was made by changing an operating lease contract into a

finance lease contract. In the second quarter, Hapag-Lloyd signed operating sale and leaseback agreements

with two international container suppliers. The standard industry agreements concern the sale of some

13,300 containers which will be leased back until their final physical disposal. The sale was concluded on

28 June 2013, generating a liquidity inflow of USD 28.3 million (EUR 21.5 million).

Cash flow from financing activities

The net impact of the Company’s financing activities was a cash inflow of EUR 122.8 million. Cash inflows of

EUR 382.6 million were partially offset by regular interest and capital repayments totalling EUR 259.8 million.

New borrowing consisted of loans to finance vessels and containers.

Condensed sTaTemenT of Cash floWs


Cash flow from operating activities 14.9 106.9 –9.4 100.9

Cash flow from investment activities –163.9 –38.7 –336.3 –163.7

free cash flow –149.0 68.2 –345.7 –62.8

Cash flow from financing activities 61.4 –48.7 122.8 –130.0

Changes in cash and cash equivalents –87.6 19.5 –222.9 –192.8

19


Overall, the aggregate cash outflow totalled EUR 222.9 million in the first six months of 2013, such that after

accounting for exchange rate effects at the end of the reporting period, cash and cash equivalents of EUR

341.7 million were reported. The cash and cash equivalents dealt with in the statement of cash flows cor-

respond to the balance sheet item “Cash and cash equivalents”. In addition, there is an as yet unused credit

facility worth USD 95.0 million (EUR 72.7 million).

Sound financing structure

At EUR 2,249.5 million, the Group’s net debt was higher as at 30 June 2013 than at year-end 2012, when

it stood at EUR 1,811.1 million. This increase was above all due to new borrowing to finance investments in

ships and containers and also due to a decline in cash and cash equivalents.

finanCial solidiTy

in million EUR 30.6.2013 31.12.2012

Cash and cash equivalents 341.7 560.8

Financial debt 2,591.2 2,371.9

net debt 2,249.5 1,811.1

gearing (%) 73.5 58.2

unused credit lines 72.7 72.1

equity ratio (%) 43.6 45.5

developmenTs in Cash and Cash equivalenTs


Cash and cash equivalents at beginning of period 437.0 447.1 560.8 672.5

Changes due to exchange rate fluctuations –7.7 26.7 3.8 13.6

Net changes –87.6 19.5 –222.9 –192.8

Cash and cash equivalents at end of period 341.7 493.3 341.7 493.3

20


ChAnges in The AsseT sTruCTure

As at 30 June 2013, the Group’s balance sheet total was EUR 7,022.1 million – EUR 170.8 million higher

than the figure at year-end 2012. While non-current assets grew by EUR 278.4 million, current assets shrank

by EUR 107.6 million.

Within non-current assets, there was a particularly marked rise in the carrying amount of property, plant

and equipment. This resulted from investments of EUR 356.9 million in ocean-going vessels and exchange

rate effects of EUR 44.4 million on the reporting date. Other additions related to the scheduled renewal of

container stocks, with EUR 104.5 million being invested in new containers.

Condensed BalanCe sheeT

in million EUR 30.6.2013 31.12.2012

Assets

Non-current assets 5,780.6 5,502.2

thereof fixed assets 5,727.4 5,428.9

Current assets 1,241.5 1,349.1

thereof cash and cash equivalents 341.7 560.8

Total assets 7,022.1 6,851.3

equity and liabilities

Equity 3,059.8 3,114.0

Borrowed capital 3,962.3 3,737.3

thereof non-current liabilities 2,446.4 2,301.2

thereof current liabilities 1,515.9 1,436.1

thereof financial debt 2,591.2 2,371.9

thereof non-current financial debt 2,220.4 2,048.9

thereof current financial debt 370.8 323.0

Total equity and liabilities 7,022.1 6,851.3

Asset coverage ratio I (in %) 53.4 57.4

Asset coverage ratio II (in %) 96.1 99.7

Liquidity ratio I (in %) 22.5 39.1

Net debt 2,249.5 1,811.1

Equity ratio (in %) 43.6 45.5

21


Depreciation/amortisation of EUR 169.8 million and changes in the market value of non-current derivative

financial instruments amounting to EUR 6.9 million had the opposite effect. Within current assets, increases

were seen in both trade receivables and stocks of raw materials and supplies.

Cash and cash equivalents fell to EUR 341.7 million (31 December 2012: EUR 560.8 million) due to cash

outflows for investments in ships and containers as well as scheduled interest and capital repayments

totalling EUR 651.9 million.

On the liabilities side, equity (including non-controlling interests) contracted by EUR 54.2 million to a total

of EUR 3,059.8 million as at 30 June 2013. This reduction was largely attributable to the loss recorded by

the Group. Exchange rate effects of EUR 24.8 million from currency translation had the opposite effect.

The equity ratio was approximately 44% on 30 June 2013 (31 December 2012: approximately 46%).

The rise in non-current and current liabilities resulted first and foremost from an increase in financial debt,

which was above all due to the disbursement of further loans for the delivery of four new ships. In addition,

a credit financing agreement for new containers was paid out in the second quarter. Financial debt also

increased following the exercise of a call option for a container portfolio previously classified as an operating

lease contract.

Taking cash and cash equivalents and financial debt into account, net debt as at 30 June 2013 was

EUR 2,249.5 million (31 December 2012: EUR 1,811.1 million).

For further information on significant changes to specific balance sheet items, please refer to the Notes on

the consolidated statement of financial position, which can be found in the “Notes” section.

risk AnD opporTuniTy reporT

Please refer to the 2012 annual report for details of specific opportunities and risks. At the time of reporting,

there were no risks which threatened the continued existence of the Hapag-Lloyd Group. From today’s

perspective, we do not anticipate any fundamental changes to the risk position.

On 11 January 2013, the rating agency Moody’s published its latest company profile with an unchanged

rating (B2/negative outlook). In its rating update on 28 March 2013, the international rating agency Standard

& Poor’s confirmed its issuer rating of B+ (negative outlook) for Hapag-Lloyd Holding AG.

22


As explained in the risk and opportunity report which forms part of the 2012 annual report, the downgrading

of Hapag-Lloyd Holding AG’s rating and that of the bonds it issues could result in less favourable conditions

for raising new funds and could adversely affect the price and the fungibility of the securities.

There were no major changes to the external environment or the Company’s internal conditions in the first

six months of 2013.

evenTs AfTer The bAlAnCe sheeT DATe

After the balance sheet date, various financing measures were concluded.

After the deduction of investments in containers and refinancing, the Group liquidity will thereby increase by

as much as EUR 67.9 million (about USD 88.8 million).

Also, the existing unused credit line of EUR 72.7 million (USD 95.0 million) was extended in advance by

a further three years with the option of being extended by up to two additional years.

prospeCTs

The statements made in the “Prospects” section of the Group management report for 2012 generally remain

valid as regards the medium-term growth prospects for container shipping. In the medium term, demand for

container transport services should continue to rise in tandem with expected ongoing growth in the world

trading volume.

However, IHS Global Insight Industry Intelligence (July 2013) lowered its growth forecast for global cargo

volumes in 2013 (124.6 million TEU) from 3.3% to 2.4% as a result of the sluggish recovery of the global

economy. (Details are provided in the chapter “Sector-specific conditions”) This would put the expected

rise in worldwide transport volumes in container shipping for 2013 slightly lower than the forecasted rise in

global trade.

23


In view of the fact that economic growth in the newly industrialised countries (BRICS states) was weaker than

expected, the IMF, in its current growth forecast for 2013, now only expects the global economy to expand

by 3.1%, and global trade to also increase by 3.1%. Global economic growth is currently being hampered

by the ongoing recession in the eurozone, the restrictive fiscal policy in the USA and unexpectedly weak

economic growth of just 7.5% in China in the second quarter of 2013. The stiff competition continued to

increase over the first six months of 2013.

Despite the darker outlook for the economy, Hapag-Lloyd expects transport volumes to increase in 2013.

Hapag-Lloyd remains committed to achieving a positive operating result (adjusted EBIT) for the full year

2013. It continues to pursue the medium-term goal of profitable growth based on its operating result.

Hapag-Lloyd concluded appropriate financing agreements at an early stage in order to safeguard its

financing requirements for investments. All of the new ships which have been ordered and investments in

containers will be funded through long-term loan agreements. Despite the effects of investing in newbuilds

on net debt, Hapag-Lloyd expects its liquidity situation to remain adequate for the 2013 financial year.

It remains difficult to predict how freight rates will develop. This together with the unexpectedly sluggish pace

of global economic growth, creates a large number of imponderables when it comes to forecasting earnings

for the 2013 financial year.

developmenTs in imporTanT general eConomiC and seCTor-speCifiC faCTors

influencing factor present developments expected impact in 2013

global economic growth

reduction in the global economic growth anticipated for 2013 from 3.3% to 3.1%, in the forecast increase in global trade from 3.6% to 3.1% and in the rise in global container transport volume from 3.3% to 2.4%

increasing negative factors for the anticipated increases in transport volume and revenue

Transport volume slightly higher marginally positive effect on revenue

freight rates freight rates still fluctuate strongly due to continuous stiff competition

The development of freight rates has a noticeable impact on revenue

Transport costs Trending slightly lower Transport expenses falling slightly

24

inTerim ConsoliDATeD finAnCiAl sTATemenTs i hapag-lloyd inTerim group reporT h1 · 2013

inTerim ConsolidaTed finanCial sTaTemenTs

ConsoliDATeD inCome sTATemenT

ConsolidaTed inCome sTaTemenT of hapag-lloyd holding ag for The period 1 January To 30 June 2013

in million EUR Q2 Q2 h1 H1 2013 2012 2013 2012

Revenue 1,705.8 1,793.8 3,357.7 3,395.3

Other operating income 48.5 45.7 62.1 91.3


Personnel expenses 97.5 87.4 191.1 183.1

Depreciation, amortisation and impairment of intangible assets and property, plant and equipment 86.9 77.9 169.8 159.8

Other operating expenses 54.9 59.6 126.4 133.0

operating result 50.6 2.2 –21.5 –96.5

Share of profit of equity-accounted investees 11.0 7.4 18.4 13.7

Other financial result –0.7 14.5 5.1 3.9

earnings before interest and tax (ebiT) 60.9 24.1 2.0 –78.9

Interest income 1.3 1.4 2.9 3.3

Interest expenses 40.5 31.6 76.2 61.5

earnings before income taxes 21.7 –6.1 –71.3 –137.1

Income taxes 0.8 1.2 1.4 2.6


thereof attributable to shareholders of Hapag-Lloyd Holding AG 20.7 –7.5 –73.1 –140.0

thereof attributable to non-controlling interests 0.2 0.2 0.4 0.3

25

hapag-lloyd inTerim group reporT h1 · 2013 i inTerim ConsoliDATeD finAnCiAl sTATemenTs

ConsoliDATeD sTATemenT of Comprehensive inCome

ConsolidaTed sTaTemenT of Comprehensive inCome of hapag-lloyd holding ag for The period 1 January To 30 June 2013



items that will not be reclassified to profit or loss: 0.4 - 0.4 -

Remeasurements from defined benefit plans, after taxes 0.4 –0.3 0.4 –0.3

Remeasurements from defined benefit plans, before taxes 0.7 –0.3 0.7 –0.3

Tax effect –0.3 - –0.3 -

items that may be reclassified to profit or loss: –49.8 - 18.7 -

Cash flow hedges (no tax effect) 3.7 –16.0 –6.1 –1.9

Addition to other comprehensive income (OCI) 11.3 –12.6 10.0 11.7

Reclassification to income statement due to realisation –7.6 –3.4 –16.1 –13.6

Currency translation (no tax effect) –53.5 166.7 24.8 80.5

other comprehensive income –49.4 150.4 19.1 78.3

Total comprehensive income –28.5 143.1 –53.6 –61.4

thereof attributable to shareholders of Hapag-Lloyd Holding AG –28.7 142.9 –54.0 –61.7

thereof attributable to non-controlling interests 0.2 0.2 0.4 0.3

26


ConsoliDATeD sTATemenT of finAnCiAl posiTion

ConsolidaTed sTaTemenT of finanCial posiTion of hapag-lloyd holding ag as aT 30 June 2013

in million EUR 30.6.2013 31.12.2012

Assets

Goodwill 700.2 693.9

Other intangible assets 591.4 619.5

Property, plant and equipment 4,119.7 3,785.6

Investments in equity-accounted investees 316.1 329.9

Other assets 12.6 25.7

Derivative financial instruments 25.6 32.5

Deferred tax assets 15.0 15.1

non-current assets 5,780.6 5,502.2

Inventories 194.6 178.3

Trade accounts receivable 524.0 449.5

Other assets 109.7 110.4


Income tax receivables 20.0 13.1

Cash and cash equivalents 341.7 560.8

Non-current assets held for sale 21.2 0.0

Current assets 1,241.5 1,349.1

Total assets 7,022.1 6,851.3

27


ConsolidaTed sTaTemenT of finanCial posiTion of hapag-lloyd holding ag as aT 30 June 2013

in million EUR 30.6.2013 31.12.2012

equity and liabilities

Subscribed capital 66.1 66.1

Capital reserves 3,269.8 3,269.8

Retained earnings –263.5 –190.4

Cumulative other equity –13.2 –32.3

equity attributable to the shareholders of hapag-lloyd holding Ag 3,059.2 3,113.2

Non-controlling interests 0.6 0.8

equity 3,059.8 3,114.0

Provisions for pensions and similar obligations 153.3 151.8

Other provisions 60.3 87.5

Financial debt 2,220.4 2,048.9

Other liabilities 5.4 5.4


Deferred tax liabilities 1.9 1.6

non-current liabilities 2,446.4 2,301.2

Provisions for pensions and similar obligations 3.8 3.7

Other provisions 124.7 119.5

Income tax liabilities 3.6 4.4

Financial debt 370.8 323.0

Trade accounts payable 909.1 886.4

Other liabilities 103.9 99.1

Current liabilities 1,515.9 1,436.1

Total equity and liabilities 7,022.1 6,851.3

28


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29


ConDenseD ConsoliDATeD sTATemenT of CAsh flows

Condensed ConsolidaTed sTaTemenT of Cash floWs of hapag-lloyd holding ag for The period 1 January To 30 June 2013


Cash inflow(+)/outflow(–) from operating activities 14.9 106.9 –9.4 100.9

Cash inflow(+)/outflow(–) from investing activities –163.9 –38.7 –336.3 –163.7

Cash inflow(+)/outflow(–) from financing activities 61.4 –48.7 122.8 –130.0

net change in cash and cash equivalents –87.6 19.5 –222.9 –192.8

Cash and cash equivalents at beginning of the period 437.0 447.1 560.8 672.5

Change in cash and cash equivalents due to exchange rate fluctuations –7.7 26.7 3.8 13.6

Net change in cash and cash equivalents –87.6 19.5 –222.9 –192.8

Cash and cash equivalents at the end of the period 341.7 493.3 341.7 493.3

30

ConDenseD group noTes i hapag-lloyd inTerim group reporT h1 · 2013

noTes on The prinCiples AnD meThoDs unDerlying The

inTerim ConsoliDATeD finAnCiAl sTATemenTs

General notes

The presented condensed interim consolidated financial statements of Hapag-Lloyd Holding AG and its sub-

sidiaries, hereinafter referred to as the Hapag-Lloyd Group, were prepared for the interim report according

to the International Financial Reporting Standards (IFRS) and the relevant interpretations by the International

Accounting Standards Board (IASB) as they are to be applied in the European Union (EU). Therefore, these

financial statements to the interim report in accordance with IAS 34 do not contain all information and notes

that are necessary according to IFRS for complete consolidated financial statements to the end of a financial

year.

The presented interim consolidated financial statements cover the period 1 January to 30 June 2013.

The accounting and measurement principles applied in the interim consolidated financial statements are

the same as those used for the last consolidated financial statements at the end of the financial year,

with the exception of the necessary adoption of new standards since 1 January 2013.

Results of interim periods are not necessarily indicative of results that can be expected for future periods

or the entire financial year. The earnings position of the Hapag-Lloyd Group is principally shaped by the

seasonality of transport volumes and freight rates in the container shipping business. Fluctuations result from

the usually higher demand for transport services in the container shipping business during the second and

third quarters.

The interim consolidated financial statements are presented in euros (EUR). All amounts recognised for the

financial year are reported in million euros (EUR million) unless otherwise stated.

The functional currency of Hapag-Lloyd AG and its subsidiaries is the US dollar. However, the reporting

currency of Hapag-Lloyd Holding AG is the euro. For the purpose of integrating Hapag-Lloyd AG and its

subsidiaries into the financial statements of the Hapag-Lloyd Group, balance sheet assets and liabilities

are translated into euros as at the balance sheet date (closing date rate) using the middle rate of that

day. The transactions listed in the statement of cash flows and the expenses and income shown in the

consolidated income statement are translated at the average exchange rate for the reporting period. The

resulting differences are recognised directly in other comprehensive income.

As at 30 June 2013, the closing USD/EUR exchange rate stood at USD/EUR 1.3067. It was therefore

lower than the rate of USD/EUR 1.3185 recorded on 31 December 2012. At USD/EUR 1.3136, the average

rate for the first half of 2013 was considerably higher than the average rate for the prior year period of

USD/EUR 1.2975.

Condensed noTes To The inTerim ConsolidaTed finanCial sTaTemenTs

31

hapag-lloyd inTerim group reporT h1 · 2013 i ConDenseD group noTes

Segment reporting

Since Hapag-Lloyd Holding AG at the time of the preparation of the interim financial statements to

30 June 2013 neither traded bonds or equity instruments on any public market nor presented the consoli-

dated financial statements to regulatory authorities for the issuing of instruments, there was no obligation

to prepare any segment reporting as at the reporting date.

New accounting standards

The following changes to existing standards published by the IASB, which have already been endorsed, had

to be applied for the first time in the interim financial statements presented. Unless stated otherwise, their

first-time application did not have a significant effect on the net asset, financial and earnings position of the

Hapag-Lloyd Group:

• Amendment to IAS 1: Presentation of Items of Other Comprehensive Income

• Amendment to IAS 12: Deferred Tax: Recovery of Underlying Assets

• Amendment to IAS 19: Employee Benefits

• Amendments to IFRS 1: Severe Hyperinflation and Removal of Fixed Dates

• Amendments to IFRS 1: Government Loans

• Amendment to IFRS 7: Offsetting Financial Assets and Financial Liabilities

• IFRS 13: Fair Value Measurement

• IFRIC 20: Stripping Costs in the Production Phase of a Surface Mine

• Annual Improvements to IFRS (2011)

The amendment to IAS 1 Presentation of Items of Other Comprehensive Income affects the way in which

other comprehensive income is shown in the statement of comprehensive income. The amended standard

requires items of other comprehensive income to be grouped into those which will subsequently be

reclassified to the income statement (“recycled”) and those which will not. If the items are listed gross –

i. e. without being offset against the effects of deferred taxes – deferred taxes must no longer be presented

as a single total. Instead, they must be allocated to the two groups of items of other comprehensive income.

The presentation of other comprehensive income in the consolidated statement of comprehensive income

has been adjusted in line with the new regulations.

The change in IAS 12 with regard to deferred taxes on real estate held as financial investment clarifies that

as a rebuttable presumption the carrying amount of certain assets is generally realised by sale; this applies to

real estate held as financial investment and measured using the fair value model of IAS 40.

32


The amendments to IAS 19 relate primarily to the way in which defined benefit pension plans are

recognised and valued. The revised version of IAS 19 removes the option to recognise actuarial gains and

losses in the financial statements, with the result that they may only be recognised directly and fully in

other comprehensive income. Furthermore, expected income from funded pension plans was previously

calculated at the beginning of the respective period based on the executive management’s forecasts

regarding changes in the value of the investment portfolio. Following the application of IAS 19 (revised 2011),

interest on funded pension plans may only be taken into account based on the standard discount rate for

pension obligations. In addition, IAS 19 (revised 2011) contains expanded disclosure requirements overall

for employee benefits.

The first-time application of IAS 19 (revised 2011) changes the way in which the Hapag-Lloyd Group cal-

culates the net pension expenses arising from defined benefit plans, in particular with regard to the interest

portion of these net pension expenses. Until now, the anticipated return on plan assets has been calculated

based on managers’ expectations regarding returns on the investment portfolio. Following the application

of IAS 19 (revised 2011), the return on plan assets is measured in a standardised fashion using the interest

rate for discounting pension obligations. As a result of this change, the Hapag-Lloyd Group saw a EUR 50

thousand fall in its net pension expenses for the 2013 financial year. The remeasurement result – which

is included in other comprehensive income – increased accordingly. The first-time application of IAS 19

(revised 2011) does not affect the volume of pension obligations reported because the Hapag-Lloyd

Group already recognised actuarial gains and losses in other comprehensive income in full. The expanded

disclosure requirements will be observed for the first time in the complete consolidated financial statements

produced by the Hapag-Lloyd Group at the end of the 2013 financial year.

With the amendments to IFRS 1, first-time adopters of IFRS can, after a phase of “serious hyperinflation”,

assess assets and liabilities at their respective fair value in the IFRS opening balance sheet. This is yet

another exemption to the retroactive application of all IFRS. Additionally, as the fixed date of 1 January 2004

was replaced by “time of transition to IFRS”, first-time adopters can do without a retroactive calculation of

valuation differences for financial assets and liabilities at fair value for which there is no active market.

A further amendment to IFRS 1 concerns government loans granted at a rate of interest below the market

interest rate. Insofar as such loans were granted on or after the date of transition, they are to be measured at

their fair value. In the case of government loans in existence at the time of transition, these can be measured

in accordance with the former financial reporting standard.

33


In connection with the amendment to IAS 32 regarding the offsetting of financial assets and financial liabilities,

changes were also made to IFRS 7 Financial Instruments: Disclosures to integrate additional information

about offsetting practices into the Notes to the financial statements. The new disclosures relate primarily to

quantitative information about the financial instruments covered which are offset against one another in the

statement of financial position and/or for which offsetting agreements exist. Although the new regulations

in IAS 32 are only mandatory for annual periods beginning on or after 1 January 2014, the amendments to

IFRS 7 must be observed in the current financial year, 2013. As the Hapag-Lloyd Group does not conduct

offsetting on a large scale, this does not affect the way in which the net asset, financial and earnings position

is presented in the Notes to the consolidated financial statements.

The standard IFRS 13 Fair Value Measurement provides uniform measurement criteria across all standards

for the measurement of the fair value by defining the term and describing which methods can be considered

for its measurement. Furthermore, the Notes to the financial statements are expanded such that the fair

values of all assets and liabilities assessed at fair value must be classified, for example depending on the type

of measurement criteria used. The expanded disclosure requirements will be observed for the first time in

the complete consolidated financial statements produced by the Hapag-Lloyd Group at the end of the 2013

financial year.

Interpretation of IFRIC 20 is concerned with the accounting of stripping costs in the development phase of a

surface mine. The interpretation clarifies under which conditions the stripping costs can be capitalised as an

asset and how initial and follow-up assessments of the asset must be performed.

Amendments were made to five standards as part of the Annual Improvements to IFRS (2011) process.

These include a clarification pertaining to IFRS 1 that IFRS 1 is also applicable if reporting was already

carried out in accordance with IFRS in the past and, after a hiatus, IFRS is applied anew, and also the

clarification that borrowing costs capitalised before the transition to IFRS may be retained. In addition, there

was a clarification to IAS 1 regarding comparative information from the previous year and relating to the

amendment of financial reporting methods and retroactive adjustments, the introduction of IAS 16 provisions

regarding the inclusion of servicing equipment as property, plant and equipment, the stipulation in IAS 32

that tax effects caused by distributions to investors or by the costs of an equity transaction are to be

recognised in accordance with IAS 12 Income Taxes, and a clarification in IAS 34 regarding how to make

segment disclosures of assets and liabilities in interim reports.

34


Group of consolidated companies

The consolidated financial statements include all significant subsidiaries and investments accounted for

using the equity method. As before, Hapag-Lloyd Holding AG and 49 companies were fully consolidated as

at 31 December 2012 within the interim financial statements as at 30 June 2013 and five companies were

included using the equity method.

seleCTeD noTes To The ConsoliDATeD inCome sTATemenT

Revenue is primarily generated from the rendering of transport services. Revenue includes proportional

income from unfinished voyages as at the balance sheet date.

Transport expenses mainly comprise fuel costs, expenditure for port, terminal and container transport

services, chartering, leases and container rental expenses, maintenance and repair costs, and charges for

other services.

The interest result essentially comprises interest expenses for bank loans and bonds, fees for guarantees

and interest from finance leases.

seleCTeD noTes on The ConsoliDATeD sTATemenT of finAnCiAl posiTion

Goodwill

Goodwill rose by EUR 6.3 million compared with 31 December 2012 due to the USD/EUR exchange rate.

35


Property, plant and equipment

Alongside depreciation, the changes to property, plant and equipment primarily relate to the addition of

four ocean-going vessels from the “Hamburg Express” class and payments on account for ordered

newbuilds. The payments on account as at 31 December 2013 were reclassified for the delivered vessels.

In June 2013, an existing operating lease contract for containers was altered such that Hapag-Lloyd is

now obliged to acquire the leased containers when the contract expires. The contract is therefore now a

finance lease contract and the portfolio of containers has been capitalised at a total carrying amount of

EUR 11.0 million (USD 14.4 million). Legal title will be transferred to Hapag-Lloyd when the call option is

exercised.

The containers recognised in conjunction with all existing finance lease contracts had a total carrying amount

of EUR 21.7 million as at 30 June 2013.

Gains of EUR 17.9 million (USD 23.4 million) were realised on the disposal of 13,300 containers between

12.5 and 15.5 years old to two international container suppliers in the course of sale and leaseback

transactions.

Non-current assets held for sale

A decision was taken in the second quarter of 2013 to sell six ships in the second half-year. Pursuant to

IFRS 5, assets with a carrying amount of EUR 21.2 million were therefore reclassified as non-current assets

held for sale.

Derivative financial instruments

Derivative financial instruments include positive and negative market values from currency forward contracts

and commodity and currency options.

properTy, planT and equipmenT

in million EUR 30.6.2013 31.12.2012

Vessels 3,383.9 2,944.0

Container, chassis 460.6 378.0

Other equipment 117.4 119.2

Prepayments on account and assets under construction 157.8 344.4

Total 4,119.7 3,785.6

36


Equity

The remeasurement of defined benefit plans (30 June 2013: EUR –62.3 million; 30 June 2012:

EUR –24.0 million) results primarily from actuarial gains and losses taken directly to equity which arose

from the measurement of gross pension obligations and from the difference between the return on

plan assets calculated using a standard method and the actual return.

The reserve for cash flow hedges includes changes in the market value of hedging transactions recognised

directly in equity and amounted to EUR 3.0 million as at 30 June 2013 (30 June 2012: EUR –1.9 million).

The effects arising from currency translation recorded in the first half of 2013 totalled EUR 24.8 million

(prior year period: EUR 80.5 million). This contains differences from the translation of subsidiary financial

statements prepared in a foreign currency and from the conversion of goodwill carried in foreign currency.

Other provisions

During the purchase price allocation, existing contracts were identified, the contractual terms of which

at the time of acquisition indicated negative fair values compared with the current market conditions.

The amortisation of these items in the first half of the financial year 2013 led to a reduction in transport

expenses.

In the second quarter of 2013 provisions for liability losses were released in the amount of USD 17.0 million

(EUR 13.0 million).

Financial debt

finanCial deBT

in million EUR 30.6.2013 31.12.2012

Liabilities to banks 1,699.3 1,499.0

Bonds 659.2 655.8

Liabilities from finance lease contracts 220.6 215.8

Other financial debt 12.1 1.3

Total 2,591.2 2,371.9

37

Liabilities to banks increased, largely as a result of four credit tranches disbursed in connection with the

financing of newbuilds in the “Hamburg Express” class with a total carrying amount on the balance sheet

date of USD 369.5 million (EUR 282.8 million). Furthermore, as at the balance sheet date, further liabilities

of USD 19.9 million (EUR 15.2 million) were also recognised in connection with the keel laying of the vessels

“Ludwigshafen Express” and “Beijing Express” respectively.

At the end of the 2012 financial year Hapag-Lloyd had access to an unused credit facility of USD 58.0 million

(EUR 44.0 million) to fund investments in containers. An additional USD 22.0 million (EUR 16.8 million) was

drawn down from this credit facility in 2013 in connection with a payment to purchase reefer containers.

In June 2013, an existing operating lease contract for a portfolio of containers was altered such that

Hapag-Lloyd is now obliged to acquire the leased containers by the end of the lease tenure at the latest.

The contract is therefore now classified as a finance lease contract. The resulting liabilities came to

USD 14.4 million (EUR 11.0 million) as at 30 June 2013.

An agreement was reached in June 2013 in connection with the order for a total of 20,250 new containers

to sell the containers in several tranches and then to lease them back for a period of eight years each.

Hapag-Lloyd has the right to buy the containers back at the end of the contract and is highly likely to exer-

cise this right. The sale of the first tranche of 5,600 containers generated a cash inflow of USD 14.4 million

(EUR 11.0 million) on 28 June 2013. In accordance with SIC 27 Evaluating the Substance of Transactions

in the Legal Form of a Lease, the container lease contract is shown as credit financing. The lease contract

is essentially a form of borrowing with the container portfolio transferred by way of security. Accordingly, the

containers are still being reported and depreciated in the Group. The interest on the loan is recognised in

interest expenses.


finanCial deBT By CurrenCy eXposure

in million EUR 30.6.2013 31.12.2012

Financial debt denoted in USD (excl. transaction costs) 2,049.3 1,798.8

Financial debt denoted in EUR (excl. transaction costs) 588.8 599.2

Interest liabilities 23.2 32.0

Accounting for transaction costs –70.1 –58.1

Total 2,591.2 2,371.9

38


noTes To The ConDenseD ConsoliDATeD sTATemenT of CAsh flows

Ordinary business activities resulted in an outflow of cash and cash equivalents totalling EUR 9.4 million in

the first six months of 2013 (prior year period: EUR 100.9 million).

The cash outflow from investing activities amounted to EUR 336.3 million in the first half of the 2013 financial

year (prior year period: EUR 163.7 million). EUR 392.1 million was paid for investments in property, plant

and equipment and intangible assets (prior year period: EUR 254.3 million). These funds mainly relate to

payments for the delivery of four vessels, containers and prepayments for the ordered newbuilds. These

outflows were partly offset by incoming payments from the sale of property, plant and equipment and non-

current assets as well as dividends received totalling EUR 55.8 million (prior year period: EUR 90.6 million).

Financing activities generated an inflow of cash and cash equivalents totalling EUR 122.8 million in the

first half of 2013 (prior year period: outflow of EUR 130.0 million). This resulted from cash inflows of

EUR 382.6 million (prior year period: EUR 165.6 million) offset by regular interest and capital repayments of

EUR 259.8 million (prior year period: EUR 158.7 million). In the previous year, funds of EUR 136.9 million

were also used to repay hybrid II capital including interest. The inflow of funds in the first half of 2013

resulted primarily from the financing of the four newbuilds delivered, loans disbursed for the keel laying

of two vessels and the financing of containers.

oTher noTes

Legal disputes

Since May 2011, the European Commission has been examining whether EU competition law has been

violated since the exemption regulation for liner conferences was abolished in October 2008. Hapag-Lloyd

is also affected by the investigations. The Company believes that the transport services were provided in

line with EU competition regulations.

Obligations from operating lease contracts

The Group’s obligations from operating lease contracts above all relate to charter and lease agreements

for vessels and containers, and rental agreements for business premises. The agreements have terms of

between one year and 18 years, with the majority of them having a term of up to five years. Some of the

agreements include prolongation and purchase options and price adjustment clauses. The containers leased

under sale and leaseback transactions are used in the short term at standard market leasing rates until they

are ultimately transferred to the purchaser.

Charter agreements for ships are always structured as time charter contracts, i.e. the charterer carries a

portion of the vessel running costs alongside the capital costs, which are reimbursed as part of the charter

rate. In the existing charter agreements, these operating cost refunds account for around 50% of the

charter expenses.

In the first half of 2013, lease payments of EUR 368.1 million were posted to expenses (prior year period:

EUR 370.2 million) of which EUR 171.6 million were charter expenses (prior year period: EUR 198.2 million).

Total future minimum lease payments from non-cancellable operating lease contracts consist of the following:

The fair value was ascertained by discounting the future minimum lease payments using a market interest

rate of 1.6% p. a. (31 December 2012: 1.4% p. a.). The obligations rose marginally due to the completed sale

and leaseback transactions.

39


in million EUR 30.6.2013 31.12.2012

Vessels and containers 709.5 733.6

Administrative buildings 106.7 117.3

Other 148.9 143.6

Total 965.1 994.5

fair value 931.4 962.4

40


Other financial obligations

The Group’s other financial obligations as at 30 June 2013 comprise a purchase obligation for investments

in container ships amounting to EUR 181.1 million (31 December 2012: EUR 502.1 million).

Related party disclosures

In carrying out its ordinary business activities, the Hapag-Lloyd Group maintains indirect or direct relation-

ships with related companies and individuals and with its own subsidiaries included in the consolidated finan-

cial statements. All of the transactions with related parties were executed on the basis of international price

comparison methods in accordance with IAS 24 on terms that are also usual with non-Group third parties.

Further information on related parties is included in the Notes to the consolidated financial statements for

2012 under “Other notes”.

signifiCAnT TrAnsACTions AfTer The bAlAnCe sheeT DATe

After the balance sheet date, various financing measures were concluded.

After the deduction of investments in containers and refinancing, the Group liquidity will thereby increase by

as much as EUR 67.9 million (about USD 88.8 million).

Also, the existing unused credit line of EUR 72.7 million (USD 95.0 million) was extended in advance by

a further three years with the option of being extended by up to two additional years.

41

hapag-lloyd inTerim group reporT h1 · 2013 i

Hamburg, 7 August 2013

Hapag-Lloyd Holding AG

The Executive Board

Michael Behrendt

Peter Ganz Ulrich Kranich

november 2013 Publication of interim report for third quarter/first nine months of 2013

march 2014 Publication of annual financial statements and annual report 2013

may 2014 Publication of interim report for first quarter of 2014

August 2014 Publication of interim report for second quarter/first six months of 2014

november 2014 Publication of interim report for third quarter/first nine months of 2014

imprinT

Hapag-Lloyd AG

Ballindamm 25

20095 Hamburg

Investor Relations

Telephone: +49 (0)40 3001-2896Fax: +49 (0)40 3001-72896

Group Communication

Telephone: +49 (0)40 3001-2529

Fax: +49 (0)40 335360

www.hapag-lloyd.com

finanCial Calendar 2013

finAnCiAl CAlenDAr i hapag-lloyd inTerim group reporT h1 · 2013

42

hapag-lloyd Ag · Ballindamm 25 · 20095 hamburg · www.hapag-lloyd.com

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